Thursday, October 04, 2007

Govt assures car makers on used vehicles

The government has assured local car makers that the ban on the entry of used vehicles will stay when the Japan-Philippines Economic Partnership Agreement takes effect.

Trade Undersecretary Elmer Hernandez told reporters he had discussed with the members of the Chamber of Automotive Manufacturers of the Philippines Inc. their concerns on JPEPA, especially a provision outlining the cooperation of the two countries in relation to exports.

“I have met with Campi, they want assurance from government that the prohibition [on used vehicles] would continue and that the provision is a safety net rather than an opening. It’s a protection, either way,” said Hernandez.

Japan is the biggest source of converted used vehicles that are brought into the country.

Hernandez said the Olongapo Regional Trial Court and the Court of Appeals had ruled against the constitutionality of Executive Order 156, which banned the entry of used vehicles into the country, at the time when government was negotiating with Tokyo on the auto sector provision under the JPEPA.

“Article 27 is the protection of the automotive industry. Our concern at that time, if we lost our case before the Supreme Court, what do we do about used vehicles? If we win, what do we do? So we put that article as protection,” said Hernandez.

He said Article 27 served as a protection if the courts ruled against the constitutionality of EO 156.

The Supreme Court has since upheld the constitutionality of EO 156. The second motion for reconsideration filed by importers is pending before the high court.

Hernandez also cited a provision in JPEPA respecting all domestic laws of both the Philippines and Japan.

“We will not open EO 156. There are exceptions under EO 156 such as ambulance, fire trucks and vehicles of returning Filipinos from abroad and should we allow used vehicles to come in, this would be limited to exemptions under the directive,” said Hernandez.

He added that if the Philippine government decided to lift the ban on the entry of used vehicles, it would only do so with a certification of roadworthiness before arrival.

Tokyo, however, does not certify the roadworthiness of converted vehicles.

“We could not prohibit the entry of used vehicles from Japan under JPEPA since it would be a restraint to trade. Besides, Japan has a corresponding law on that. Right now, we have EO 156, and the basis of that is EO 226, or the Omnibus Investment Act, which provides for the protection of investments of industries in the country,” said Hernandez.

He said it was necessary to put such provision in the agreement since with a free trade agreement in place, anything can come in or out of both countries.